Legislators had questions Tuesday about students who do not retain their lottery-funded scholarships and indicated they expect to generate a new formula for the awards.
About 13,000 Arkansas high school graduates have been granted lottery-funded scholarships for the coming school year, and about another 1,000 are in the pipeline, Interim Higher Education Department Director Shane Broadway told legislators at a meeting of the Legislative Lottery Oversight Committee.
About 40 percent of prior students lost their scholarships for reasons that included not taking enough credit hours, not sustaining a 2.5 grade-point average or dropping out.
Broadway said the state spent about $27 million on students whose scholarships that were not renewed.
Broadway said that before the lottery, Academic Challenge Scholarship recipients had to sustain a 2.75 grade-point average but the rate at which students lost their scholarships has remained about the same.
Legislators haven’t said what changes they want to make to how scholarships are awarded. The topic is to be on the agenda during fall meetings.
Students this year are to receive $4,500 if they attend a four-year school and $2,250 if they attend a community college. Legislators may change the award amounts when they look at retooling the system.
The first class of scholarship recipients in 2010 had to wait, in some cases into the school year, to find out if they had been awarded money. Since then, the Higher Education Department has automated the system for determining whether traditional students — those just graduating from high school — qualified for awards. Almost all have been notified of their status already.
Broadway said his agency has spent less in processing applications but said changes in the how scholarships are awarded could cause delays in notifying students next year.
“We may have to hire temporary workers” again, Broadway said, asking that money be kept in next year’s budget as a safety net. The agency used temps in the first year scholarships were awarded.
For nontraditional students, department employees still have to go through applications by hand as many include multiple transcripts. Those students are still being notified of their awards.
Also, the panel approved a contract revision the Lottery Commission agreed to Monday with its instant ticket vendor, Atlanta-based Scientific Games.
The company agreed to cut its rates by about $430,000 per year, give the state a $2 million payment before the fiscal year ends June 30 and a $200,000 credit for merchandise awarded to lottery players. The $2 million will go to scholarships, lottery Director Bishop Woosley said.
Sen. Johnny Key, R-Mountain Home, a co-chair of the committee, said he’d like to see unfilled positions at the lottery written out of state law. Woosley said the agency has 83 employees and is authorized to have 95.
Woosley, who makes about $115,000 per year, not including bonuses, said the organization is saving money on salaries with the departure last year of former director Ernie Passailaigue and his two top deputies.
Passailaigue earned $324,000 and vice presidents David Barden and Ernestine Middleton each earned $225,000. The vice president positions haven’t been filled, however commissioners have agreed to consider allowing Woosley to hire a deputy if his workload becomes too great.
“I may have to hire a COO (chief operating officer),” Woosley said after the meeting.
Woosley said he expects the lottery to improve its bottom line next year with the introduction of an Arkansas-only numbers game and further promotion for other draw games, including Powerball and Mega Millions.
About $94 million is expected to be available for scholarships. The lottery had revenue last fiscal year of $464.1 million.
(The Associated Press)